## Facts

- Guillaume Motorsports, Inc. leased commercial property to Kenneth and Kay Bower under a lease containing an option to purchase for $295,000.
- The lease included a broker-commission clause requiring Guillaume to pay Cantrell-Waind & Associates, Inc. $15,200 “upon closing” if the closing occurred within two years of the lease’s execution (by August 1, 1996).
- On April 23, 1996, the Bowers, through counsel, gave written notice that they exercised the option and sought the earliest possible closing.
- Guillaume’s president offered to credit the Bowers with one-half of the broker’s commission if they agreed to delay closing until after August 1, 1996; the Bowers refused.
- By July 19, 1996, the Bowers’ financing had been approved and the lender awaited a closing date.
- The Bowers’ counsel testified that attempts to schedule a July closing were met with statements that Guillaume’s president would be out of the country and unavailable until after August 1, though counsel asserted the president was actually available.
- The transaction closed on August 14, 1996, after the two-year deadline, and the commission was not paid.
- Cantrell-Waind sued for breach of contract; the circuit court granted summary judgment to Guillaume, reasoning Guillaume had no obligation to set a closing date that would trigger a commission.

## Issues

1. Whether a contracting party may rely on the nonoccurrence of a contractual condition when that party allegedly hindered or prevented the condition’s occurrence in bad faith.
2. Whether the evidence created genuine issues of material fact on alleged bad-faith delay, making summary judgment improper.

## Decision

- The Arkansas Court of Appeals reversed and remanded.
- The court held that contracts carry an implied duty of good faith and fair dealing, and a party may not deliberately hinder a condition and then invoke the condition’s failure to avoid performance.
- The court concluded that record evidence (including the proposed commission-splitting inducement and claimed misstatements about unavailability) could support a finding that Guillaume delayed closing to avoid paying the commission.
- Because intent and interference were fact questions on this record, summary judgment was improper.

## Legal Principles

- Every contract includes an implied duty of good faith and fair dealing in performance and enforcement.
- When a promisor’s cooperation is necessary for a condition to occur, the promisor must act in good faith and use reasonable efforts not to obstruct the condition.
- A condition may be excused when a party prevents or hinders its occurrence through bad-faith conduct; the party cannot benefit from its own interference.
- Summary judgment is improper where evidence permits competing inferences on intent, interference, and whether the condition’s nonoccurrence should be excused.

## Conclusion

The court held that a seller-lessor could not avoid a bargained-for broker commission by intentionally delaying a closing past the contractual deadline, and it remanded because disputed facts about bad-faith interference precluded summary judgment.


Cantrell-Waind & Assocs., Inc. v. Guillaume Motorsports, Inc., 62 Ark. App. 66, 968 S.W.2d 72 (Ark. Ct. App. 1998)